Harold Corporation manufactures and sells a single product. The company uses units as the measure of activity in its budgets and performance reports. During March, the company budgeted for 7,900 units, but its actual level of activity was 7,860 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for March: Data used in budgeting: Fixed element per month Variable element per unit Revenue - $ 39.80 Direct labor $ 0 $ 7.70 Direct materials 0 18.00 Manufacturing overhead 38,200 1.50 Selling and administrative expenses 27,400 0.50 Total expenses $ 65,600 $ 27.70 Actual results for March: Revenue $ 297,318 Direct labor $ 59,962 Direct materials $ 135,850 Manufacturing overhead $ 51,370 Selling and administrative expenses $ 31,950 The activity variance for selling and administrative expenses in March would be closest to:

Activity variance =  $20 U

Explanation:

given data

budgeted in march = 7,900 units

Actual level of activity=7860 units

Revenue = $297,318

Direct labor = $59,962

Direct materials = $135,850

Manufacturing overhead = $51,370

Selling and administrative expenses = $31,950

solution

first, we get here budgeted Selling and administration expense

budgeted Selling and administration expense = Variable expense + Variable expense    1

here

Variable expense = 0.5 × 7900 = $3,950

and

Fixed expense = $27,400

so

Total Budgeted selling and administration expenses = (3950+27400)

Total Budgeted selling and administration expenses  =  $31,350

and

Flexible budget for Selling and administration expenses will be

Total Flexible budget of Selling and administration cost = Variable expense + Fixed expense    2

Variable expense = 0.5 × 7860 = $3,930

and

Fixed expense=$27,400

so

Total Flexible budget of Selling and administration cost = 3930 + 27400

Total Flexible budget of Selling and administration cost  = $31,330

and

Activity variance = (31350 - 31330) = $20 U

(since actual performance was worse than budgeted)

and

Activity Variance is due solely to the difference between the activity  level in the budget and the actual activity level

so

Difference in the activity level = (7900-7860)

Difference in the activity level = 40 units

so

Variable rate = $0.5 per unit

and

Activity variance = 0.5 × 40

Activity variance =  $20

so here Fixed expense will not change with activity level

the answer would be voluntary exchange -

"the act of buyers and sellers freely and willingly engaging in market transactions. moreover, transactions are made in such a way that both the buyer and the seller are better off after the exchange than before it occurred."

hope this : )

-shy